Intel CEO Gelsinger Exits as Chip Pioneer's Turnaround Falters

Intel CEO Pat Gelsinger has stepped down amid the company's continued struggles against rivals, with shares losing over half their value this year. The chipmaker announced Monday that Chief Financial Officer David Zinsner and Executive Vice President Michelle Johnston Holthaus will serve as interim co-CEOs while the board searches for a permanent replacement.

Gelsinger, 63, was hired in 2021 to lead an ambitious turnaround aimed at reclaiming Intel's technological edge from competitors like Taiwan Semiconductor Manufacturing Co. His strategy included expanding Intel's factory network with new facilities in Ohio and transforming the company into a contract manufacturer for other firms. The plan faced significant headwinds as Nvidia dominated the AI chip market, with cloud computing companies increasingly favoring Nvidia's processors for AI development over Intel's Gaudi line.

Intel's challenges culminated in an August earnings report showing a surprise loss, leading to dividend suspension and plans to cut over 15% of its 110,000-person workforce. Board Chairman Frank Yeary, now serving as interim executive chair, emphasized the need to prioritize Intel's product group to meet customer demands. The leadership change also impacts the Biden administration's semiconductor industry initiatives, as Intel was set to receive the largest grant under the $39 billion Chips Act program.

Multiple news outlets including Bloomberg and Reuters report that Gelsinger was forced out by the board because "directors felt Gelsinger's costly and ambitious plan to turn Intel around was not working and the progress of change was not fast enough."